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The Problems And The Solutions To The Nigerian Power Sector By Ettu Mohammed

All the agencies that drive the power sector are controlled by the Nigerian Government hence they should never attempt to abdicate power responsibility.


The Transmission Company of Nigeria is 100 % owned and managed by the Federal Government of Nigeria and it is the weakest in the Nigerian Electricity Network.

TCN is the heart of the Generating and Disco Company that was privatized in 2013.

Hence technically the FG owns the Disco and Gencos. Moreover The FG still owns 40% of  the privatized Genco and Disco.

When the heart is not working it means you are dead no matter what you do with the body. 

The TCN is morribund and can't push more the more than 5000MW over 24hrs as it has never since inception it will never happen. 

We have over 12500MW Electricity Generating Plants  installed in Nigeria but the absence of necessary Gas network to the plants left most of them idle. Many were built during the PDP era apart from the biggest IPP in Edo which started in 2014 kitted with Siemens gas engine. 

It was situated 1km to a gas network. 

Government is saddled with the responsibility to build a robust gas network but they ain't doing same.

The Same Federal Government of Nigeria via NERC and NBET controls the tariff and everything in the Power Sector is technically managed by Government. 

All the agencies that drive the power sector are controlled by the Nigerian Government hence they should  never attempt to abdicate power responsibility.

Every equipment used in the power sector is import dependent and when Nigerian government  devalued her currency  in 2016 , energy was sold at N30/kWh averagely circa 2016  that was 15.2¢ after devaluation it dropped to  8.3¢ today that is 45% loss in tariff.
We should not forget the Discos and Gencos  borrowed in USD and they will pay back in dollars. With devaluation they owe 132% extra on the borrowed funds because they earn in Naira.

It is simply you borrowed $1m in 2013 that is N155m without interest rate and you want to pay back in 2019 that is N360 million=$1m without interest rates. 

It means this companies are indebted to the tune of N205m extra because they will earn in Naira and pay in Dollar and your currency has been devalued.

How will they survive with this mess? 

This does NOT also exonorate the Discos from the mess the power sector is saddled with. Majority of the Disco owners have no business running a power utility firm but this is Nigeria where anything goes. 

To make the power Sector work we have to rejig the Power sector Policy.

It is whacked and will never work.

A comprehensive Power policy should address as opined by Mr Adekunle Shotubo who is also versed in the power sector and I agree 100%.

1. Pricing of gas 
2. Payment systems at end user and across value chain 
3. Ownership of gas pipelines 
4. Location of power generating  stations 5. Grid flexibility 
6. Entry requirements for diverse power generating sources 
7. Extent of government involvement 
8. Gas exploration, production and distribution 
9. Power and all energy should be under one ministry and not a separate one for petroleum and gas 
10. A real professional either in governance, discipline or commercial space in power, oil and gas sector should head the ministry 
11. Transparent governance structures 
12. All power facilities (from gas to home) should be covered by the national treasures act (I hope we even have one) is the practice in Ghana and SA.